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Gawker received approximately 8 million hits last week, ergo they are swimming in oodles of extra ad revenue. Apple is just milking a new and profitable revenue stream, or at least their legion of blood sucking lawyers are.

Sure, but sites that sell ads on a CPM usually have unsold inventory, meaning that they have more impressions (e.g., page views) than advertisers willing to spend the money on them. That's why you see in-house ads and such show up. Point being, the increased traffic unlikely impacted the bottom line UNLESS the ads are CPC or CPA (and the increased traffic led to increased click-throughs and sign ups).

I started at 100%, and have slowly dwindled down to about 10-15%. I have a Mac Mini, an iPod Touch 3G (which started the love affair), had an iPhone briefly (but AT&T blows chunks). I was a huge hater. Now I'm a voice of moderation.

Oh, I'm quite fond of what Apple comes out with, I just really hate Apple itself.

Apple was being too quiet last week. I knew the other shoe would drop, it was just a matter of time. If Chen is lucky, the police are really more interested in the identity of the thief (if they don't know it already).

However, my guess is that the police are trying to build a strong case that Giz definitely knew it was stolen prior to paying $5000 for the device. Not sure who goes down in a situation like that: whether it's Jason Chen or Nick Denton.

Nick Denton gets filed next to the Japanese man who killed himself a while ago because he lost an Apple prototype and knew his life was ruined. Nick will likely get fired by Apple for carelessness and never work in the tech industry again.

Tell me more, LostCluster. You clearly have a good grasp of who the key players in this story are and what exactly their roles are.

Actually, from what I understand, California law states that it is illegal for someone to find something off the street, take it as their own, and then sell it (in other words, what I've heard is that there is no "finders keepers" right in California, at least if you don't bother to let the police look for the true owner first). Supposedly, it becomes extra illegal if you have good reason to believe that it's owned by someone else but don't try to return it (of which there is, supposedly, no evidence in this case). As should be common sense, since it's illegal to sell something you found if you have reason to believe it belongs to someone then it's also illegal to buy something from someone when you have reason to believe they aren't the legal owner. In this case, both the person selling it and Gizmodo had every reason to believe that the phone was the rightful property of Apple. In fact, the only reason their story could be considered newsworthy was if it had left the possession of Apple unintentionally. It seems, to me, like a slam dunk that Gizmodo broke the law. They're trying to defend themselves by claiming that they have a right to gather news from anonymous sources based on a previous court case but this is totally different from the case I heard about. In the previous case I heard mentioned, the news agency only received information, not property and didn't even pay money for it. As far as I can see, both of those are major differences that make comparing the two cases like comparing apples and oranges. We'll see how this goes, but I wouldn't be surprised if they end up spending some time in California "pound me in the ass" prison.

Finders keepers isn't the rule generally. Even small children are taught that. Treasure in shipwrecks leads to big arguments over ownership centuries later. You don't lose you property rights just because you misplace or are deprived of something (in the old days the big problem was property that departed on its own, i.e., livestock... the owner had to pay damages for what the critter ate or broke, but it was still his). Only if something is *abandoned* is it up for grabs. Would any reasonable person things the prototype was abandoned? Reportedly they even sought legal counsel, knowing they were pushing it.

The only reason the iPhone was worth $5k to them was that even possessing it was wrongful. Buying something from a thief, even unknowingly, also gives you no prperty right, and it's just silly for them to say it was "lost." They knew what they were doing by paying that much alone, and I'm sure more evidence will pop up when the suspects squeal on each other.

Arguably Apple's profit could be damaged here. I have no idea how they could prove that (and Apple can sue for civil damages, using the conviction as a slam-dunk proof of the facts), and I assume it will go to settlement anyway given the legal fees it would cost to defend it. It could get ugly.

Gizmodo did a very dumb thing. (Not to mention the party who found and sold the phone, knowing it wasn't his, either.) Remember though that it's the gov't not Apple that decides whether to bring criminal charges. Apple could ask them to drop it, but it sounds like they're OK with the brute force approach, or else the prosecutor wants to do what the prosecutor wants to do.

In Australia we also have "Theft by finding" laws which have recently and very publicly undone a Melbourne couple [sbs.com.au]. Many people don't realise that these laws exist and can have quite serious consequences to their lives if they don't make an attempt to get the property back its owners.

496. (a) Every person who buys or receives any property that hasbeen stolen or that has been obtained in any manner constitutingtheft or extortion, knowing the property to be so stolen or obtained,or who conceals, sells, withholds, or aids in concealing, selling,or withholding any property from the owner, knowing the property tobe so stolen or obtained, shall be punished by imprisonment in astate prison, or in a county jail for not more than one year.However, if the district attorney or the grand jury determines thatthis action would be in the interests of justice, the districtattorney or the grand jury, as the case may be, may, if the value ofthe property does not exceed nine hundred fifty dollars ($950),specify in the accusatory pleading that the offense shall be amisdemeanor, punishable only by imprisonment in a county jail notexceeding one year.
A principal in the actual theft of the property may be convictedpursuant to this section. However, no person may be convicted bothpursuant to this section and of the theft of the same property.
(b) Every swap meet vendor, as defined in Section 21661 of theBusiness and Professions Code, and every person whose principalbusiness is dealing in, or collecting, merchandise or personalproperty, and every agent, employee, or representative of thatperson, who buys or receives any property of a value in excess ofnine hundred fifty dollars ($950) that has been stolen or obtained inany manner constituting theft or extortion, under circumstances thatshould cause the person, agent, employee, or representative to makereasonable inquiry to ascertain that the person from whom theproperty was bought or received had the legal right to sell ordeliver it, without making a reasonable inquiry, shall be punished byimprisonment in a state prison, or in a county jail for not morethan one year.
Every swap meet vendor, as defined in Section 21661 of theBusiness and Professions Code, and every person whose principalbusiness is dealing in, or collecting, merchandise or personalproperty, and every agent, employee, or representative of thatperson, who buys or receives any property of a value of nine hundredfifty dollars ($950) or less that has been stolen or obtained in anymanner constituting theft or extortion, under circumstances thatshould cause the person, agent, employee, or representative to makereasonable inquiry to ascertain that the person from whom theproperty was bought or received had the legal right to sell ordeliver it, without making a reasonable inquiry, shall be guilty of amisdemeanor.
(c) Any person who has been injured by a violation of subdivision(a) or (b) may bring an action for three times the amount of actualdamages, if any, sustained by the plaintiff, costs of suit, andreasonable attorney's fees.
(d) Notwithstanding Section 664, any attempt to commit any actprohibited by this section, except an offense specified in theaccusatory pleading as a misdemeanor, is punishable by imprisonmentin the state prison, or in a county jail for not more than one year.

496a. (a) Every person who, being a dealer in or collector of junk,metals or secondhand materials, or the agent, employee, orrepresentative of such dealer or collector, buys or receives anywire, cable, copper, lead, solder, mercury, iron or brass which heknows or reasonably should know is ordinarily used by or ordinarilybelongs to a railroad or other transportation, telephone, telegraph,gas, water or electric light company or county, city, city and countyor other political subdivision of this state engaged in furnishingpublic utility service without using due dil

You can't possibly be stupid enough to think that making a perfunctory phone call (even if he's telling the truth) relieved him of the obligation not to sell someone else's property. That's not the way the law works. Whoever the thief was clearly knew what he had and he sold it to Gizmodo because he knew its value. An honest man would have at least given it to the bartender at the bar when it was found. Period.

"He reached for a phone and called a lot of Apple numbers and tried to find someone who was at least willing to transfer his call to the right person, but no luck. No one took him seriously and all he got for his troubles was a ticket number."

That's a start - and more effort than I had previously heard about - but still is not really enough considering what the finder had. Not because it was some precious unreleased Apple device, but because it was a GSM cellphone. A finder could easily have popped out the SIM card to look at its labeling.* From there, a finder could have contacted the carrier and asked that the carrier request the subscriber to give him a call for return of the device. It defies belief that none of these experienced tech journalists would have realized this possibility existed.

The finder and the journalists had ample opportunity to do this right, but they chose not to. Now the consequences are upon them, and it's hard for me to work up much sympathy.

[*: Given there's only one carrier in the US which is known to use that SIM form factor, it shouldn't have been much of a challenge to discover the carrier even absent a SIM label.]

We only have Gizmodo's word for that. This is a site that seems to specialize in stealing stories from others to generate ad revenue. Other than this iphone crap, 9 out of 10 front page gizmodo stories are via via stories. When I saw these stories I was shocked to learn that Gizmodo actually made their own content.

They also claimed this guy's facebook app was on there and logged in. Did he try calling any numbers listed "home", "parents"? Publicly naming the guy was a dick move, and as others have pointed out they have more options to try and return it.

I have tried to deal with Apple on a number of occasions, every time it was not something I HAD to do, but something I felt obliged to do. I dutifully called them up, recorded the process, recorded the messages I left (try to get a real person there, I dare you!), and gave them more then enough time to get back to me (several days). I also left the same message on a number of relevant voice mails.

Apple just won't deal with you, they are Apple, and you are beneath them. If you are not a known kiss-up, they won't return your calls, emails, or anything else. Try, don't try, it doesn't matter, they won't get back to you. Insiders have told me that this is policy, not a fluke.

Oh, but he called the bar later to see if the guy had been looking for it!

Oh, wait, he didn't. He called two news outlets to see if they wanted to buy it.

Clearly Gizmodo's source stole the phone. Given the amount the phone is worth, this is likely a felony charge. Add in some possible industrial sabotage or other statutory crimes, the thief is in trouble if he is found out. Hope he spent that $5k on some tickets out of the country.

The question is whether Gizmodo can be considered on the hook. They had to knowingly receive stolen goods.

This is a difficult question to answer. There are a lot of inferences that must be made. A jury could probably go either way, but my gut tells me they'd get off.

Still, it is likely there is enough to get this to the jury. The calculus is do you want to put your trust in twelve people, or plea out?

And Gizmodo can't rely on the First Amendment. This isn't stalking a celebrity like Gawker's used to.

Cry me a river about bloggers as journalists. You want to be called a journalist? Fine. Have the nuts to go to jail to cover a source. Also, have the ethics to cover a story like this properly.

Being a journalist comes with duties and responsibilities. If you don't want to take on those burdens, then you can't hide behind the protections journalists receive.

Just because you can't contact the owner doesn't mean you get to sell something that doesn't belong to you, otherwise every thief would just say "well I wrote them a letter! Not my fault they didn't get it.". If you find something you're suppose to try and contact the owner and if you can't turn it over to the police. Gizmodo is completely guilty of buying stolen goods. They knew without a doubt that the item they bought did not belong to the person they bought it from. That's the definition of receiving stolen goods.

I studied criminal law in California in college. There is no crime without intent. If you do not intend to deprive someone of their property indefinitely, then you are not committing a crime. If I find your wallet and contact you, twice, and you REFUSE to accept it back, how am I now a thief?

You obviously didn't do very well in college law since California law (and many other states btw) say that if you find something of value (over $250) you must turn it over to the police. They did not. It is also illegal to purchase stolen goods, which Gizmodo did.

You took a criminal justice class on crime and think you understand criminal law?

You are correct. Generally crimes require intent. Even so, some crimes are strict liability crimes and require no intent. These are typically citation crimes (like speeding, or parking tickets).

Here, this crime requires intent. What you don't understand is what meets this intent requirement.

For example, what are the required elements of the crime of theft? Taking the property of another person without permission or consent.

But we still need intent. Adding intent might leave us with something like this: Knowingly taking the property of another person without permission or consent.

But then, there are also different levels of intent. For example, perhaps we don't want the standard for intent to be knowingly. Perhaps we want it to be purposefully. This is a stronger requirement: Not only did you need to know, but you had to do it with purpose. This is akin to premeditation.

Or, perhaps we want a lesser standard. Recklessly taking the property of another person without permission or consent. Or negligently taking it.

But all of this is academic and varies from jurisdiction to jurisdiction. So let me explain how intent might be found here.

A phone is sitting on a bar stool. It is not your phone. You know it is not your phone. You do not see the owner of the phone nearby. So, you take the phone.

The phone didn't fall into your pocket on its own. It wasn't there by accident. You intended to bend over and grasp the phone with your hand, carry it out of the bar, and back to your residence. You intended to do all of that.

So, there you go, your basic intent. It exists. Do me a favor -- if you get in trouble, call a lawyer and don't rely on your undergrad criminal justice course.

The real fun begins when they have to make the evidence of intent meet the standard for the specific crime. (The purposeful, knowing, reckless, negligent spectrum.) I doubt many people will view the original taker as innocent considering he didn't give it to the bar, didn't call the bar later, didn't leave it with the police, and instead sold it to someone for $5000.

But, then again, maybe someone at Gawker thought they understood "intent" because they, too, had taken an undergrad criminal justice course.

I don't throw around legal terms as if I know what they mean. I do know what they mean.

Unlike you, I'm not a paralegal. I'm a lawyer. Not a California lawyer, but a lawyer in another state.

You may think you know what it means, but all you're doing is showing why paralegals aren't attorneys.

I'm sorry you're embarrassed for being shown up so thoroughly that you have to sling insults around. But, let me break it down for your paralegal mind:

The "bold" section of what you cite places a reasonableness standard on the finder. The question is whether a reasonable person in the finder's situation would have acted as the finder did in trying to find the owner and give him back his property.

You may remember from your expansive legal background that this is the so-called "reasonable person" standard.

The question is whether the evidence at hand supports a finding by the jury that the finder did or did not act reasonably in trying to contact the owner. The burden will likely be beyond a reasonable doubt.

You, in your paralegal mind, seem to think this is a simple case of matching facts to elements. It is not.

Each fact will carry its own weight for each juror. Clearly, if you were a juror, you would put a lot of weight on the finder's attempt to contact Apple. To you, that satisfies the statutory requirement.

Obviously, others disagree with you. Others believe he should have called the bar. Or given it to the bar staff. Or given it to the police.

What is clear is that, based on the sparse facts we have, there is sufficient evidence on both sides to support the two possible conclusions: (1) he acted reasonably, (2) he acted unreasonably.

Which is why a potential charge is likely to be sustained. To translate for your paralegal mind: they could take this to a jury to decide.

So, while this guy has arguments that he did act reasonably, a prosecutor also has arguments that he did not act reasonably.

I hope this helps you understand WTF you're talking about, since obviously you didn't before.

Yes, he called AppleCare, which is run by call centres (in the US) that are managed by third party companies, with staff who do not work directly for Apple. I'm not surprised they thought he was prank calling them. He knew very well that the support number is *not* going to know what to with a lost prototype (assuming they even believe him) other than "call Apple corporate" - with a specific PR office number listed right on Apple's site, which I presume he didn't since they would certainly have told him to return the phone immediately. Also, "they weren't in" is no excuse - he could call them in office hours the next day.

He did the very minimum necessary to make it look like he tried to give it back, while deliberately skirting around anyone who would tell him that in no uncertain terms. He had the 4G prototype in his hands - you *really* think he is going to hear "umm, what prototype" from the support reps and then assume "I guess Apple, a company well known for its secrecy, doesn't want the phone back" and then proceeded to sell it for $5000.

Also, the source of the "he tried to give it back, honest" is Gizmodo itself - the very people under criminal investigation and the people he sold the phone to. What do you expect them to say?

Apple is a corporation. It has personhood, and if any part of the company disclaimed ownership of the device then the whole company did so. The fact that its left hand doesn't know what its right hand is doing is their fault, not his.

Jason Chen appears to be in a "What did you know and who told you it?" situation where he isn't supplying the identity of his source... because this isn't a source of information but a source of stolen goods.

Among the many problems with your statement are the following:

1) The items in question were not stolen. According to the news coverage, not only did the person who found the phone, FIND it in a public place (which by definition can not be a theft, at least in the State of California). He then attempted to give it to Apple. Apple then said "not ours, we don't want it."

2) Under California State law, journalistic actions have many protections. The State can not force a journalist to reveal information pertaining to a source. The State can not confiscate goods relating to the distribution of news. The State can not prosecute a journalist who acted in the interest of journalism who acted good faith (with some non-related exceptions).

Lastly it does amuse me greatly that everyone who states "XXX person committed a felony by purchasing stolen goods" has just committed libel. Congratulations, you have now given XXX the option of filing suit against you for defamation of character with one of very few acts that do not require proof of monetary harm. See:
http://en.wikipedia.org/wiki/Defamation [wikipedia.org]

The finder wanted to return the phone to its rightful owner and couldn't confirm it was Apple and didn't trust that the bartender wouldn't just sell it once he realized it was valuable.

2) A thief would say that. And we know he's a thief because he sold the device that he didn't actually own.

When Gizmodo bought the story, he asked them to take on the task of returning the phone to it's rightful owner -- which they did. The phone was returned before the police were involved. Rather than entrusting the phone to a 3rd party such as the bartender at the bar where the phone was found, the finder believed a 3rd party like Gizmodo was more likely to be trustworthy and more likely to be able to ascertain the true owner. It's not an unreasonable assumption to have made.

You're in fantasy land now. If the possessor of the phone's intention was to use Gizmodo to find the true owner of the phone, why did he ask and receive $5000 from Gizmodo?

At any no time, as money was changing hands, did anyone believe that they owned the phone in question. Both parties understood the phone belonged to neither of them and that Gizmodo would take on the responsibility of returning the phone, which they did.

iPhones are not designed to be opened by end users. Doing so can cause damage. Yet Gizmodo opened the case to take photographs. Thats no more the action of someone taking on a responsibility to return a phone, than the payment of $5000 was. Gizmodo's only concern was to buy a stolen phone so they could photograph is and make a story bout it. The offer to return it only came AFTER they published, at which point they weren't in a position NOT to offer to return it.

Now here's your challenge as a prosecutor. Prove thats not true.

The payment of $5000 for a phone that was not owned by the seller is plenty enough evidence to convict on. That much is clear even from what is publicly known. The search warrant may provide further evidence.

Unless you can find video tape of Jason Chen accepting the phone and then exclaiming "Hell yeah, we totally own this phone now and do not intend to return it unless contacted by the lawyers of a large consumer device corporation. High Five!" then I suspect that's going to be a hard thing to prove. But of course, the standard IANAL disclaimer applies here.

BasilBrush- your story doesn't add up at all. Gizmodo had no reason to ever own the phone. He didn't need to own the phone to get pictures and once he had pictures he certainly couldn't have ever owned it so he MUST have purchased the story rights only. The fact he possessed it doesn't mean he owned it.

Oh, we know none of them owned it. It was never owned by anyone but Apple. The fact that you don't own something you have in possession is not a defence against having stolen it, nor having bought stolen property. It's NEVER owned by those people.

The fact that money changed hands in one direction, and stolen property came the other way is quite enough to establish the fact that they bought stolen goods. Regardless of whether they were eventually going to return it to Apple.

If I steal your car / "find it", pass it onto another person, who then promises to give it to you if you go pick it up, 4 weeks after it was stolen. 1 week after it was sold. Having been dismantled in the meantime, and used to make money in a photoshoot. That still counts as theft and buying stolen property.

Rather than entrusting the phone to a 3rd party such as the bartender at the bar where the phone was found, the finder believed a 3rd party like Gizmodo was more likely to be trustworthy and more likely to be able to ascertain the true owner. It's not an unreasonable assumption to have made.

His choices were more like "turn it in to the police and get a pat on the head (if that), or give it to Gizmodo and get a fat check".

Gee, I wonder why he chose Gizmodo.

At any no time, as money was changing hands, did anyone believe that they owned the phone in question.

I don't think you understand how "selling stolen property" laws work. You don't get out of it just by saying "neither of us believed we were transferring ownership of the property in question". Or do you think the "I'm not guilty of selling stolen property - my buyer and I both knew the painting belongs to the museum!" excuse should fly?

By your logic, it's not possible to be guilty of buying or selling stolen property unless you're actually innocent. In other words, you've got it exactly backward.

If you know the device is not yours, and you give it to a third party in exchange for money - I don't believe for a second he would have given it to Gizmodo for free - then you've sold stolen property. It doesn't matter whether either party believes you're transferring ownership or not. The guy who found the phone shouldn't have given up after he couldn't get a hold of anyone at Apple who would know whether it was missing; he should have given it to the police.

But actually, they bought the phone. And they said they paid $5000 for it. Many times. On their own web site.

That's like saying,"I'm not paying a hooker to have sex with me, I'm paying her for her time, and if we just happen to get it on as two consenting adults it's not prostitution." That don't fly in court, either.

dear/.er. I found your car keys so I drove your exotic sports car around for a few weeks to find you. I then sold it to a dealer who said they'd return it to you. They drove it, dismantled it, and published some photos and videos before they finally gave it back to you even though they knew it was yours the whole time. I wasn't selling the car, I was selling a story about the car. Prove that's not true.

Revealing Apple trade secrets is only a crime if Apple gives them to you and says "Do not reveal this". If you read the California Statute (which has been copy/pasted a bajillion times), it clearly states this.

In other words, you can charge an Apple engineer with revealing trade secrets -- but if he accidentally cc's you on an email containing trade secrets, you can tell anyone you like.

You and I and Gizmodo are under no obligation to help Apple keep Apple's secrets. That's not our job. It would be an unfair burden to place upon us -- a limit to our freedom. Imagine if I emailed you 1000 of Apple's trade secrets and now the law compelled you to keep them a secret. Imagine how you have to edit yourself to avoid accidentally spilling the beans. Do you understand now why this isn't a crime? If you are not employed by Apple, you shouldn't have to do their job (protecting secrets) for them.

Trade secrets are also protected by Trade Secrecy Acts (in most States). That widens the scope for protection to secrets that are revealed without consent, through espionage, through violation of an NDA, via theft, etc.

It is just as 'dangerous' for a company to hire a competitor's employee and be accused of stealing trade secrets as it is for the company that originally employed the person; even if the secret wasn't actually revealed by the employee (ie. independently invented/created/etc) it looks very suspicious and could create a huge legal problem for the 'poacher'.

This is also why 'clean room' implementations are done without using people that have any direct inside knowledge of or association to the product that is being re-implemented.

Unless Gismondo signed a "Non Disclosure Agreement" they are entitled to reveal "trade secrets". There is no more a law forbidding that than a law forbidding me to reveal where my cat hid the dead budgie.

If it was a trade secret, probably shouldn't have been off campus in a bar, huh?

Seriously, is this story bringing out the worst Apple apologists? They're using the law to intimidate (again), because something didn't go their way. Steve Jobs is basically evil, and those of you with a huge confirmation bias need to check your heads.

Heck, I'll be sure never to attempt to return a lost phone to its owner in CA if you get pegged for being a thief when the owner refuses to claim it unless it hits the press...

The guy who found the phone supposedly called the Apple tech support line, whose operators didn't know anything about this supposed phone, and could reasonably assume he was a prank caller or a crazy. You can't reasonably conclude that Apple refused to claim the phone, because the people inside Apple that knew about it were not contacted.

But in any case, if you find a lost cell phone in California, and you can't contact the correct person to return it to, you can simply give it to the police. More than that, actually, you must turn it in to the police. From the California Civil Code:

2080.1. Delivery to police or sheriff; affidavit; charges

(a) If the owner is unknown or has not claimed the property, the person saving or finding the property shall, if the property is of the value of one hundred dollars ($100) or more, within a reasonable time turn the property over to the police department of the city or city and county, if found therein, or to the sheriff's department of the county if found outside of city limits, and shall make an affidavit, stating when and where he or she found or saved the property, particularly describing it. If the property was saved, the affidavit shall state:

(1) From what and how it was saved.

(2) Whether the owner of the property is known to the affiant.

(3) That the affiant has not secreted, withheld, or disposed of any part of the property.

(b) The police department or the sheriff's department shall notify the owner, if his or her identity is reasonably ascertainable, that it possesses the property and where it may be claimed. The police department or sheriff's department may require payment by the owner of a reasonable charge to defray costs of storage and care of the property.

Note that in the case of the iPhone prototype, this process of turning over the phone to the police would have created a public record of the existence of the prototype, and a detailed description of it. This is really, really bad for Gizmodo, because they could have gotten their story simply by helping the guy to turn the phone in to the police and getting the first scoop on the contents of the affidavit describing the phone and the circumstances of its finding. But instead they bought the phone from him. At that point they're already not on good ground, but instead of then returning it to Apple or turning it in to the police, they disassemble it for personal gain.

"California law [citmedialaw.org] regulates what you can do when you find lost property in the state. Section 2080 of the Civil Code provides that any person who finds and takes charge of a lost item acts as "a depositary for the owner." If the true owner is known, the finder must notify him/her/it within a reasonable time and "make restitution without compensation, except a reasonable charge for saving and taking care of the property." Id. 2080. If the true owner is not known and the item is worth more than $100, then the finder has a duty to turn it over to the local police department within a reasonable time. Id. 2080.1. The owner then has 90 days to claim the property. Id. 2080.2. If the true owner fails to do so and the property is worth more than $250, then the police publish a notice, and 7 days after that ownership of the property vests in the person who found it, with certain exceptions. Id. 2080.3."

That's what the law says. Is that what happened? No? Then maybe you shouldn't crack wise.

Wait, what? Journalists are immune from having their computers seized? In what dreamworld? They have the exact same first amendment protections as the rest of us. No more, no less. If Apple can get a warrant (which they obviously can), those computers are fair game, along with anything else that might be relevant to the charges.

The only reason that, traditionally, journalists had extra privileges was because they worked for large litigious media outlets who wouldn't put up with that horseshit, and the government was rightfully wary. These days, not so much.

Apple has a long history of suing people over trade secret violations, and since all you have to have to be a "trade secret" is simply to be arguably valuable, and, you know, secret, it's not hard to do. In this case I imagine they're looking in to charging them for full-on corporate espionage (which is a felony) and which the guy may be open to, depending on how he obtained the phone.

Read the Gawker Media response... they're claiming that Jason Chen's home was a "newsroom" and therefore exempt from contempt changes and warrents. We'll see if this holds water when they try to get any evidence from this search kept away from the jury.

The law quoted only protects from search warrants intended to discover the source of a journalist's INFORMATION. It of course doesn't protect from search warrants intended to discover the source of a journalist's STOLEN GOODS.

First off, he *says* he called apple. Second, The law doesn't care who you call. What matters is that you return the item either to owner, the place you found it, or to the police. This guy did not of those things and then sold it for $5,000.

Correction: Gizmodo claim that the person they bought the stolen property from had tried ringing Apple. It's not a fact. What we do know is that the person who took the iPhone from the bar, neither tried to find the owner via the bartender, nor the police.

More to the point, we know that he SOLD the phone he didn't own to Gizmodo for $5000. This last point really should clue you in to the nature of the person in question.

Your hatred of Apple must be pretty extreme if you become an apologist for thieves just to spite them.

Try again this is not abandoned property. Abandoned property assumes the owner probably did not want it and intended to leave it behind. In no way would that apply here. And Abandoned property is still owned by the original owner until the finder meets the requirements to claim it by law. Lost, misplaced and abandoned property are all still owned by there owners until the finder meets the legal requirements to claim ownership.

Newspaper offices aren't exempt from crap. They're out of their minds. (disclaimer: sitting in a newspaper office right now)

Historically, whenever a journalist has been jailed for not ratting out a source, the cops have pulled all their stuff right off their desks. There is no legal exemption just because you happen to work for a media outlet.

Is there a federal exemption to search and seizure of property of a journalist? no.

Is there a state exemption in California to search and seizure of property of a journalist? Yes.

Was the search warrant executed a warrant issued by a federal bench? No.

Read the article and the response; the response cites California state law by statute. A simple web search will confirm that the quoted law is, in fact, accurate.

To me, an educated layman, it seems obvious that the warrant was invalid. There may be new case law since 2006 that changes the legal precedent, but without that, the warrant is not valid, prima facia.

They're seizing his equipment as being involved in a felony, right out of the gate. It has nothing to do with the law as stated, which is only about protecting sources.

For a "protecting your source" law to come in to play, legal action has to have already started and the journalist has to have refused to provide a judge or federally warranted offical the required information. That's where the contempt stuff comes into play.

(it was abandoned, therefore not stolen, plus he returned it to Apple).

1) HE (the person who took it from the bar) didn't return it to Apple. He sold it to Gizmodo. Given that it wasn't his to sell, and he knew both the company, and the individual engineer that it did belong to, that's evidence of theft right there.

2) The only person that knows for sure whether it was left on a bar stool, or lifted from a pocket, is the person at the bar that took the phone. Gizmodo is simply repeating the word of someone who offered them a prototype phone they didn't own for the sum of $5000.

3) Not that it matters if it was simply left on a bar stool. If you are on someone else's property, e.g. a bar, you can't just pick up something you don't own and take it home with you. If you don't know who's it is, you either leave it alone, or you hand it in to the person who's premises you are on. e.g. the barman.

It's very telling that you criticise the company that was stolen from, but not the thief.

wait, so i find a hundred dollar bill on the floor of a bar. I look around, ask people near by, did you drop this? I wait, see if anyone is checking for the bill. I'm supposed to give it to the bartender, or go to the nearest police station to turn it in?

Yes. Otherwise you are a thief. What exactly are you confused about? You seem to remember something about "Finder's keepers, losers weepers" from when you were a child? Time to grow up.

A journalist purchased what he knew to be someone else's property, took it apart, and only gave it back a week later after the owner found out who had it because the journalist posted pictures of it on their website.

Losing something in a bar does not mean you abandoned it. Gizmodo certainly knew that Apple would want their phone back immediately, and yet they still purchased it from someone with the intention of disassembling it and publishing information about it. And didn't attempt to return it until they started to realize what sort of trouble they were in.

Apple certainly does make some dickhead moves, but the Gizmodo people are just as big a bunch of assholes in the case, and I don't know how you can honestly argue that they didn't knowingly purchase something that they shouldn't have had access to. They may have thrown together some twisted logic to convince themselves that it wasn't shady and most likely illegal, but apparently that logic hasn't worked so well on the cops.

First of all, you can't just claim you own something if you find it. They teach you this on Sesame Street: You have to either give it to the police to hold for 30 days or report it to the management of the place you found it. Selling something you do not rightfully own is illegal.

This has nothing to do with the bad customer service stories. This incident easily cost Apple millions of dollars in lost sales as people who were going to buy iPhones between now and the summer will instead wait for the new version.

California's laws are much more lenient than those for most of the rest of the country, which, yes, is good.

However, they don't apply in this case. If they're charging him with a felony, they're charging him with grand theft, or with corporate espionage. Has nothing to do with protecting his "source", and has everything to do with him obtaining property that doesn't belong to him. If they can prove he paid for it, he's fucked.

Journalists have *more* rights than the rest of us. This is a good thing.

The hell it is! Those rights should extend to everybody. There is such a thing as equal protection under the law. That is a legitimate entitlement we all have. No person or position should be granted "special" rights, of any kind. We are all the same here on the playing field, officers and men alike.

Apple lost its trade secret protection when their employee left the phone at the bar. If someone had picked it up and reported on it there and then, Apple would have no legal recourse. It is not the responsibility of the world at large to protect Apple's trade secrets for them. The only thing that could result in a charge here is the fact that Gizmodo paid $5000 for the prototype.

Note that right now Apple isn't proven to have done anything at all. This story was all over the media, and the San Mateo DA may have decided to press charges without consulting with Apple, or being prompted by Apple to do so.

Also note that I could have anything stolen that was worth $5000 and the best that I'd get out of the cops is a sympathetic look and some advice to check with my insurance.

Its unlikely that the guy who stole your $5,000 device is going to post a lengthy article about it. The police have almost no hope of recovering stolen goods but when somebody makes it this easy for them I would hope they would at least follow up.

There's people getting scammed on the internet daily that have ALL of the information on the criminal at hand, and the police, 9 times out of 10, tell you it's a civil matter and that they can't help. I've experienced it first hand.

Except in those cases, the "thief" doesn't actually give you your stuff back... Reality is, if this weren't' a large corporation who clearly influenced the raid, absolutely nothing would have happened from a criminal/law enforcement perspective.

Name me *ONE* case of someone "stealing" $5,000 worth of goods (read: it was left somewhere by its rightful owner), returning it, then being raided by police.

Also note that I could have anything stolen that was worth $5000 and the best that I'd get out of the cops is a sympathetic look and some advice to check with my insurance.

Of course if what you had stolen was a $5000 TV then that's the end to the crime, just possibly breaking and entering and theft.

On the other hand stealing a prototype that possibly contains trade secrets worth millions of dollars is a far different matter. Add to that the fact that they took it apart and published the information they found to everyone, including Apple's competitors, and then maybe you can see the difference between the two crimes.

2. Apple campus janitor puts it in their lost&found, notifies the police (or just sends it to the police's lost&found)3. If nobody collects (within whatever time lost&found store things, a couple weeks?), the janitor/Apple campus/police are one phone richer.4. Profit!

So, does being a journalist entitle you to full immunity from the law? The police are investigating a possible purchase of stolen goods. It's not like they are trying to arrest him simply because he wrote an article about it, or because they want to censor him.

Nothing indicated that they were trying to arrest Jason. They want info as to whom sold the found iPhone. That sounds more like a felony. Gizmodo was not trying to sell it or keep it. But is a source protected in such a case of a physical item being the 'leak'? My guess is that reporters are only protected from revealing sources of info where the original info is still in the hands of the owner.

the fact that they paid the guy who found the phone $5000 for it. The guy sold something that wasn't his, and they purchased something from someone they knew neither to be the owner nor someone repersenting the owner. In most places this is known as theft.

My understanding of the adventure of the lost iPhone 4G/HD is thus:1) Someone loses Apple property2) Someone else finds it3) Finder attempts to return it4) Apple rebuffs finder and does not attempt to recover or claim the property (at this point how can it be considered stolen???)5) Finder sells property to Gizmodo6) Gizmodo blabs about it7) Apple contacts Gizmodo and asks for their property back8) Gizmodo promtly returns property to Apple

4) Apple rebuffs finder and does not attempt to recover or claim the property (at this point how can it be considered stolen???)

How do we know this is true?

The guy who found and sold the phone is one of the parties to that particular conversation. Gizmodo wasn't there. If Gizmodo is telling about these events, that's hearsay. It could be a complete fabrication. The only way of proving this is to go through Apple's call logs or testimony from the guy who found and sold the phone. None of us knows who that person is right now.

If I was Gizmodo legal team, I'd make very certain that this event is true, correct, and provable.

This is why apple is so leak paranoid: leaks like this really contribute to the Osborne Effect

No, no. That doesn't happen with True Acolytes [misterbg.org] - Computers in those days weren't very powerful - not nearly strong enough to pull off a Reality Distortion Field. Why to do think current Apples run such powerful processors? After all UNIX ran on much more humble machines for most of it's life. And you all think that little antenna is for Wi-Fi. Fools.

When the Gizmodo punks outed the name of the Apple Engineer who lost the phone for, as near as I could tell, no good reason other than to pile on, I lost all sympathy for them. This wasn't a whistle-blower story exposing corporate crime or government misdeeds. It was just a punk profiting off of another person's misfortune.

That's what it comes down to, really. Your First Amendment rights do not trump knowingly engaging in or abetting unlawful activity. Otherwise, you would have the media encouraging people to do illegal things, just so they could have their fifteen minutes of fame, then the "reporters" can protect them as confidential sources. Even if Gizmodo can make the case that they are journalists and deserve the protection of their sources, the problem is that they admitted they knowingly paid money to procure trade secrets. Would there have been any doubt about the legality of such an action had, say, Microsoft or Google bid on the phone instead of Gizmodo? Do you think a single one of their lawyers would have actually thought such a thing might be a good idea?

Journalism used to be about uncovering truth. It doesn't mean journalists are magically immune from the law and are protected from indictment and prosecution should their methods of uncovering the truth involve illegal activities, such as knowingly purchasing stolen property. No reasonable person can believe that the person who originally obtained the phone made the appropriate effort to return it to Apple. And Gizmodo dismantled the phone, presumably to confirm it was made by Apple, and published that information once it was discovered that was the case. But the fact that they knew the name of the engineer who lost the phone, and knew he was an Apple employee, means they should not have needed to dismantle the phone in the first place to confirm its provenance.

How hard would it have been for Gizmodo to call up Apple and ask "hey, did you lose a phone?" As much as I personally would have been interested in news about an iPhone 4G, even I'm not that incompetent. Then again, everyone knows such a device has been under development. They've released a new model every year around the same time. Just freaking wait and be patient like everyone else. It's just a PHONE for fuck's sake.

Gizmodo = fucked. And deservedly so, for doing something so obviously stupid and illegal, then bragging about it.

Being a journalist doesn't protect him from charges of receiving stolen property. However, they already had written evidence to convict him of that. The only reason to subpoena all computer data is to try to discover who gave him the phone. But in doing so, they are violating the confidentiality of the journalist's source, so journalistic privilege arguably applies to protecting the identity of the original finder of the phone.

Lindsay Lohan steals an Escalade, goes on a high-speed chase up PCH, shows up at jail with a load of blow in her pants, and two years later the cops are all "hey, if you could show up for a deposition or something that would be, kind of, you know, cool and stuff."

One hardware nerd loses a phone and suddenly it's a goddamned national disaster. ZOMGMANTHEBATTLESHIPS!

Assessed home value:$580,000 (note: home was refinanced January 19, 2010)

Annual property tax:$5,999.08

Note:Jason, if it was okay to post personal information about Gray Powell to protect his job, it's okay for anybody else to post your information to protect you from getting fired. It's only fair that we do this for you!

Under California law, lost property over a given value (and a prototype iPhone certainly qualifies), you are obligated to make a credible effort to return it to the owner (the "finder" did not: after all, he never talked to the BARTENDER!) or to the police. Otherwise, it is considered stolen.

So the iPhone in question was stolen property, and Gizmodo has effectively admitted to purchasing stolen property, and knowingly having purchased stolen property.

One who finds lost property under circumstances which give him knowledge of or means of inquiry as to the true owner, and who appropriates such property to his own use, or to the use of another person not entitled thereto, without first making reasonable and just efforts to find the owner and to restore the property to him, is guilty of theft.

I'm not getting how you concluded this part. Up until the time Gizmodo examined and concluded the device was actually Apple's property, they could not have known it was a lost prototype and who knows whether they had verified that a credible effort had not been made to return it.

Better yet, did you read the inventory? Among other items, they "seized" a box of business cards. I can only imagine what horrible forms of evidence will be hiding there! Why, it might have his email address on them! Holy cow, better call CSI!!!

Selling something that you know doesn't belong to you is against the law. Plain and simple.
Buying something that you know doesn't belong to the person who's selling it is against the law. Plain and simple.

If those concepts are foreign to you then please let us enjoy our country... and you can enjoy yours (as long as someone doesn't sell it out from under you).

Simply stated, California law requires anyone picking up lost property to make a good-faith effort to return it to it's rightful owner. Here are the relevant sections

California penal code, section 485:L

One who finds lost property under circumstances which give him knowledge of or means of inquiry as to the true owner, and who appropriates such property to his own use, or to the use of another person not entitled thereto, without first making reasonable and just efforts to find the owner and to restore the property to him, is guilty of theft.

California civil code, section 2080.1:

If the owner is unknown or has not claimed the property, the person saving or finding the property shall, if the property is of the value of one hundred dollars ($100) or more, within a reasonable time turn the property over to the police department of the city or city and county, if found therein, or to the sheriff’s department of the county if found outside of city limits, and shall make an affidavit, stating when and where he or she found or saved the property, particularly describing it.

Since the finder of the phone did not follow the law, he/she could be convicted of a crime if charges are pressed. The San Mateo County Sheriff's Office was doing what it's supposed to do, although the fact that it was such a high-profile case probably moved it up to the top of their to-do list faster than it would have otherwise.

Since the finder of the phone did not follow the law, he/she could be convicted of a crime if charges are pressed.

Which is true. Jason Chen, the Gizmodo jounalist, is not that person, though. They are trying to use his notes and communications(on his computer) to either implicate Gizmodo for this as well, and/or find out who the finder is. However, there is a California law that seems to block this (in Gizmodo's lawyer's opinion); we'll have to see what a judge says.

"Under a California law dating back to 1872, any person who finds lost property and knows who the owner is likely to be but "appropriates such property to his own use" is guilty of theft. If the value of the property exceeds $400, more serious charges of grand theft can be filed. In addition, a second state law says any person who knowingly receives property that has been obtained illegally can be imprisoned for up to one year."

Gawker threw out all the journalist reputation they may have built up by outing the guy who had lost the device in question. They posted his personal information in exchange for some page views.

When they posted the Apple Engineer's name and screen shots of his facebook page complete with picture I lost all sympathy for those bastards. Maybe a year in pound me in the ass prison is bad but afterwards...

Ok, you are absolutely right and the person in questions deserves some jail time. But what the fuck is up with pound me in the ass prison glee?? Do you think that people going to jail (for purchasing stolen goods, mind you!), should be raped? Should we make this an official part of the jail sentence, to be fair?

Speaking as a reporter who deals in such things, it is hard to feel any sympathy for Mr Chen. If the phone was paid for, he broke the law, period. It is one thing for someone to break an NDA and tell you something, show you something, or let you use something that they are entitled to have. It is quite another to know something is stolen, and use it. To know it is stolen, then to PAY for it, nope, no chance that this is right.

Before you say, "You don't know what you are talking about", I can point you to literally dozens of times I have seen info/roadmaps/prototypes/whatever, but not once did I ever pay for the information, or knowingly (even suspecting) break the law to do so. Others may have before they got to me, but when things were obviously not legit, I have politely declined the info.

Once you are 'known' in the industry, and have a good reputation (I think I do), you can ask for almost any info and get it, If you burn bridges, that also gets known, and nothing ever comes your way. After a short while, it is painfully obvious what is legit and what is not. No where, no way, and no how is paying for information, or worse yet prototypes, legit. Period. Hard line.

When I first heard about this, I knew it was only a matter of time before the hammer came down on Gizmodo. It was a stunningly stupid thing to do, and how any editor, much less higher ups if they knew, would have touched this with a 10 foot pole is beyond me. Unless there is something really profound that has not made the media yet, Gizmodo did wrong.

When I have similar offers/gifts/whatever come into my life, I politely decline, and usually call the company involved, tell them in general terms what happened, and tell them directly that it was declined. You usually get profound thanks, and a good deal of karma, and you don't even have to rat out your sources because nothing happened. Win/win/win/win/lose/win/win, or something like that.:)

All this said, of all the companies I have dealt with in this type of situation, the only one that are complete bastards about it are Apple. They won't return phone calls or emails even if you are really trying to help them. Not a chance.

In this case, I can't see how the Gizmodo guys didn't do wrong in the most basic way. I reserve the right to update that opinion if more evidence comes out, but the $5000 pretty much seals it. I would expect Gizmodo to go down. Hard.